Buying off-plan property represents some of the best opportunities for those looking for value for money properties as it will generally ensure a lower price as you are buying a property which is not yet built.

The general rule in off-plan investments is to jump onto the bandwagon early. It is much easier to secure a prime plot while the development is still in its beginning stages.

According to eLan Marketing Manager, Melanie Clarkson — who recently invested at Blythedale Coastal Resort — buying land off-plan is better than a traditional property purchase especially if one is looking for quick capital appreciation.

â€œIt’s a low risk investment provided you have done your homework; you know the future demand for the area and you have confidence in the developer,” she said.

With no transfer duties and long transfer periods while infrastructure is being implemented, all an investor needs to do is pay a deposit (which goes into an interest bearing trust account), secure a bond and watch the value of their property grow.

â€œIn essence, you are paying today’s prices for something that will appreciate in value in 12 to 18 months time,” Clarkson adds.

However, there are some off-plan investments that just sound too good to be true, and most of the time they are. Many investors have been drawn into a dubious scheme. The development never materializes and the buyer ends up with a worthless piece of muddy hole in the ground.

Etienne Erasmus, CEO of Sterling Property Partners believes it is of paramount importance to establish who you are dealing with. â€œIt is best you deal with property development companies who make a career out of doing property developments.”

â€œThey have enough clout to buy the land, have the related professionals on board and do not have to source them, have good relationships with the authorities, and know the steps in the process,” he explains.

Lured by the very low price, many people make rash decisions when it comes to off-plan investments. It is essential to research on the property itself and the developers. â€œFind out previous developments that they have worked on, and see how these have fared. The success rates of dedicated property development companies in unlocking the value of the land and making sure that their developments work should be impeccable,” Erasmus advises.

With off-plan investments you are buying into an intangible — it is very much a buyer-beware investment scheme. Consider the growth potential of the area where the development is situated.

â€œWe look into various areas to see what is happening there — and what is going to happen there — by talking to the mayor, councillors and other players,” Erasmus said.

Is there a new shopping centre in the offing? Is a new local industry starting up? Are there all the relevant amenities for prospective tenants?

This is echoed by Andrew Thompson, eLan National Sales Manager. He states that units or sites which have sea views, or overlook a forest, dam, river or golf course all add value. â€œYour biggest return and demand comes for sea views,” he points out. Security and lifestyle also play a major role in pushing up the value of the land.

To ensure a guaranteed resale, investors must choose their sites carefully taking into consideration site position and orientation.

Off-plan investments are being used as a financial strategy, that has proved very profitable for many. The bottom line, however, is be sure not to skimp on doing your research.